GTAP Resources: Resource Display

Abstract
India’s high agricultural tariffs and growing farm subsidies have received much attention, but the implications of domestic policies that have discouraged agribusiness investment and created inefficient domestic markets have received less attention. We first devise an approach for analyzing the effects of improvements in marketing efficiency that might be associated with reforms that strengthen the climate and incentives for private investment in agriculture and agribusiness. We then compare these results with the impacts of more “traditional” reform scenarios involving the elimination of agricultural subsidies and tariffs. Because the equity implications of reform are a key consideration for Indian policymakers, we use a framework that disaggregates the household sector between rural and urban, and by income class. The results suggest that, in contrast to subsidy and tariff reforms, measures leading to improved agricultural marketing efficiency could yield substantial economy-wide gains in income and employment, as well as positive price impacts for both producers and consumers and distributional gains favoring low income households.